We are often asked to advise on transactional work, or a service change provision, where the Transfer of Undertakings (Protection of Employment) Regulations 2006 (known as “TUPE”) might be engaged. Whether TUPE is engaged can have significant implications, and advice should be taken at an early stage.
Our team can assist with all TUPE related matters, including:
- Buyer due diligence
- Preparing replies to TUPE enquiries
- Assisting with consultations
- Advising on pre-and post-transfer terminations
- Calculating employee related liabilities
Overview of TUPE
TUPE protects the rights of the employees on a “relevant transfer”. Where there is a relevant transfer:
- The automatic transfer principle applies. This means that employees of the seller (known as the transferor) automatically transfer to the buyer (known as the transferee).
- Transferor inherits employment related liabilities. The Buyer (transferee) steps into the shoes of the seller (transferor) and inherits relevant employment-related liabilities (including, for example, claims for constructive unfair dismissal, discrimination, equal pay, accrued debts owed to the employee).
- Seller needs to provide ELI information. The seller needs to provide to the buyer with specific information about the transferring employees prior to the completion - Employee Liability Information (known as “ELI information”).
- Obligations to inform and consult. Both the transferor and the transferee have obligations to inform and consult representatives of their employees. An obligation to consult will arise if the transferor or the transferee considers that it is to undertake “measures” regarding any of the affected employees.
- Dismissals related to the transfer are automatically unfair. Employees have special protections against dismissal and changes to their terms of employment. A dismissal will be automatically unfair (and therefore not subject to the 2 year qualification criteria) where the sole or principal reason for the dismissal is the transfer, unless it is for “an economic, technical, or organisation reason entailing changes in the workforce” (known as an ETO reason).